Bitcoin does not pose a threat to law and order

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Re: Bitcoin does not pose a threat to law and order

#21

Post by pygy_ » Thu, May 12, 2011, 3:12 PM UTC

weavejester wrote: post #16

pemulis wrote: post #8

Earlier quoted context omitted.

The only thing Bitcoin poses a threat to is the t-shirt vendors and hosting providers who are accepting it as payment. This. The volatility that makes bitcoins so attractive to speculators makes them a nightmare for merchants. Bitcoins have - on multiple occasions - dropped or risen by 25%+ in the course of a few minutes. If you accept bitcoins as payment, when should you cash them out? There's a chance that they dra…

The volatility that makes bitcoins so attractive to speculators makes them a nightmare for merchants. Well, not necessarily. You set the cost of your products to a price in dollars multiplied by the current Mt. Gox exchange rate. You could then immediately exchange your Bitcoins for dollars upon receipt of payment. Mt. Gox has an API for getting the current buy rate, and for placing a sell order, so this wouldn't be…

Or, if you sell software or other digital goods, you can set the price at a fixed rate per day (based on either a moving median, the closing price or whatever), and cash out at a longer interval.

It's a bit more risky (you may lose one day of sales if bitcoin was to crash definitely), but since you don't have any fixed cost, it shouldn't matter.

Re: Bitcoin does not pose a threat to law and order

#22

Post by Duff » Thu, May 12, 2011, 3:22 PM UTC

pygy_ wrote: post #21

weavejester wrote: post #16

Earlier quoted context omitted.

The volatility that makes bitcoins so attractive to speculators makes them a nightmare for merchants. Well, not necessarily. You set the cost of your products to a price in dollars multiplied by the current Mt. Gox exchange rate. You could then immediately exchange your Bitcoins for dollars upon receipt of payment. Mt. Gox has an API for getting the current buy rate, and for placing a sell order, so this wouldn't be…

Or, if you sell software or other digital goods, you can set the price at a fixed rate per day (based on either a moving median, the closing price or whatever), and cash out at a longer interval. It's a bit more risky (you may lose one day of sales if bitcoin was to crash definitely), but since you don't have any fixed cost, it shouldn't matter.

That's a big downside of fixed monetary systems like what many developing countries used or the gold standard. In inability to inject liquidity perpetuates instability.

In the 19th century, you'd usually see financial crises appear in the fall before harvest, because local banks would be at their weakest point before the harvest came in and crop loans were repaid.

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